Section 506 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003-Limitation on Charges for Services Furnished by Medicare Participating Inpatient Hospitals to Indians, 25124-25128 [06-3976]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES
• Indian Health Service

[Federal Register Volume 71, Number 82 (Friday, April 28, 2006)]
[Proposed Rules]
[Pages 25124-25128]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-3976]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Indian Health Service

Centers for Medicare & Medicaid Services

42 CFR Parts 136 and 489

[CMS-2206-P]
RIN 0917-AA02


Section 506 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003--Limitation on Charges for Services Furnished 
by Medicare Participating Inpatient Hospitals to Indians

AGENCY: Indian Health Service (IHS)/Centers for Medicare & Medicaid 
Services (CMS), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would establish regulations required by 
section 506 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (MMA), (Pub. L. 108-173). Section 506 of the 
MMA amended section 1866(a)(1) of the Social Security Act to add 
subparagraph (U) which requires hospitals that furnish inpatient 
hospital services payable under Medicare to participate in the contract 
health services program funded by the Indian Health Service (IHS) 
whether operated by the IHS, tribes or tribal organizations and any 
health program operated by Urban Indian organizations that are funded 
by IHS with respect to any medical care furnished under those programs. 
Section 506 also requires such participation to be in accordance with 
the admission practices, payment methodology, and payment rates set 
forth in regulation established by the Secretary, including acceptance 
of no more than the payment rate as payment in full.

DATES: Comments are due June 27, 2006. Send your written comments to: 
Betty Gould, Regulations Officer, Division of Regulatory Affairs, 
Records Access, and Policy Liaison, Indian Health Service (IHS), 801 
Thompson Avenue, Suite 450, Rockville, Maryland 20852. Telephone (301) 
443-7899. (This is not a toll free number.) Comments received will be 
available for inspection at the address above from 9 a.m. to 3 p.m., 
Monday through Friday, beginning approximately two weeks after 
publication.

FOR FURTHER INFORMATION CONTACT: Carl Harper, Director, Office of 
Resource Access and Partnerships, IHS, 801 Thompson Avenue, Rockville, 
Maryland

[[Page 25125]]

20852, Telephone (301) 443-3024; or Dorothy Dupree, Senior Policy 
Advisor for American Indian and Alaska Natives, CMS, Telephone (410) 
786-1942. (These are not toll free numbers.)

SUPPLEMENTARY INFORMATION:

I. Background

    The Indian healthcare system is comprised of the IHS, and health 
programs operated by Indian Tribes or Tribal Organizations, and Urban 
Indian Organizations (I/T/U). The I/T/Us provide, to the extent 
possible, primary, preventive and chronic health care services to 
eligible IHS beneficiaries in I/T/U operated facilities.
    In accordance with IHS regulations at 42 Code of Federal 
Regulations (CFR) part 136, the Indian Health Service and Tribes (I/Ts) 
are authorized to pay for medical care provided to IHS beneficiaries by 
non-I/T public or private providers as contract health services. 
Payment may be authorized by an I/T under the contract health services 
(CHS) program for non-I/T services for either non-emergency or 
emergency care. For non-emergency care, an advance referral from the I/
T is usually required and, for emergency care, timely notification is 
required. Authorization for CHS program payment is subject to the 
availability of funding and the exhaustion of alternative resources. 
Payment for medical services furnished is made through a purchase order 
issued to the non I/T public or private providers. While recent efforts 
have been more successful in negotiating reasonable rates, 
historically, purchase orders for CHS services have been for amounts at 
full billed charges that substantially exceeded the Medicare allowable 
rates and this problem could recur in the future.
    Under section 503 of the Indian Health Care Improvement Act (IHCIA) 
(25 U.S.C. 1660a, et seq.), urban Indian programs are authorized to 
provide referral services to eligible urban Indians (as defined in 
section 4 of the IHCIA). The urban programs are authorized to refer 
eligible urban Indian patients to non I/T/U public and private 
providers with whom the program has a signed agreement or contract. 
When an urban Indian program refers an eligible urban Indian to a non 
I/T/U public or private provider, the urban program may elect to either 
provide the referral service only or, dependent upon the availability 
of funds, to provide a referral service and cover the cost of care. 
Similar to the I/T programs, urban programs have historically had to 
pay full billed charges that exceed the Medicare allowable rates.
    The small market share of individual I/T/U programs has made it 
difficult for these programs to negotiate discounted rates, and these 
programs historically have had to pay full billed charges that 
substantially exceed the rates paid by the Medicare program. Partly as 
a result of these high costs, the need for contract health services in 
the population served by I/T/U programs routinely exceeds funding 
available to these programs.
    Section 506 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (MMA) (Pub. L. 108-173) requires the 
Secretary to issue regulations to describe admission practices, payment 
methodology and rates of payment applicable to Medicare-participating 
hospitals that furnish inpatient services when such hospitals provide 
medical care to eligible American Indian/Alaskan Native (AI/AN) 
beneficiaries and such care is authorized by the I/T/U.
    In the development of this proposed rule, the IHS consulted with 
the Centers for Medicare & Medicaid Services (CMS) Tribal Technical 
Advisory Group (TTAG). The CMS TTAG operates under the authority of 
section 204 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1534 
and consists of elected Tribal leaders of Tribal governments, or their 
designated employees acting on their behalf, as well as representatives 
of the National Indian Health Board, the National Congress of American 
Indians, and the Tribal Self-Governance Advisory Committee which are 
national Washington DC based Indian associations designated by Tribal 
leaders to act on their behalf. The CMS TTAG was established to enhance 
the Government to Government relationship and serves as an advisory 
body to CMS providing expertise on policies, guidelines, and 
programmatic issues affecting the delivery of health care for AI/ANs. 
One of the responsibilities of the TTAG is to provide advice and input 
into the development of CMS regulations.
    A subcommittee of the TTAG was established for the purpose of 
exchanging information and providing advice and input as to the 
financial and systematic impact different Medicare-like rate payment 
methodology options would have on tribal programs. The subcommittee of 
the TTAG held four meetings from May through September 2004. After 
independent consideration by the IHS of the Tribal input of the CMS 
TTAG and in collaboration with CMS, IHS developed these rules proposing 
a Medicare-like payment methodology suitable for I/T/Us. Tribal leaders 
will be mailed a copy of the proposed rule after its publication in the 
Federal Register with an opportunity to review and provide comments 
within the comment period.

Medicare-Like Rate Payment Methodology

    The term ``Medicare-like'' rate describes the rate at which the 
Medicare-participating hospitals will be reimbursed by I/T/Us as 
established by these regulations. For purposes of this regulation, the 
term ``Medicare-participating hospitals'' includes hospitals, as 
defined in 1861(e) of the Social Security Act (SSA), and Critical 
Access Hospitals (CAR), as defined in 1861(mm)(1) of the Social 
Security Act (SSA). As proposed by these regulations, the IHS is 
interpreting section 506 to apply to any level of care furnished by 
such Medicare-participating hospitals as an institution, including all 
hospital departments and provider-based entities. The TRICARE program 
of the Department of Defense has similar statutory authority and uses 
rates similar to those of Medicare for hospital-based inpatient, 
outpatient, and skilled nursing facility (SNF) care. Accordingly, IHS 
anticipates that Medicare-participating hospitals will not face any 
major problems under the approach proposed.
    Because the payment methodology proposed to be used by I/T/Us is 
slightly different from the current Medicare methodology used by CMS 
for services provided to Medicare beneficiaries, the payment rates 
under section 506 will not be identical. Thus, it is necessary that the 
IHS issue specific regulations that describe the payment methodology 
and rates of payment under section 506.
    In 1983, CMS implemented the prospective payment system (PPS) for 
hospital inpatient services provided to Medicare beneficiaries. Since 
then, CMS has implemented PPS for other provider services provided to 
Medicare beneficiaries for any services that an inpatient hospital 
provides including services of a subunit or distinct part of a 
hospital. The CMS does not publish the dollar amount that will be paid 
to each hospital for every inpatient admission or outpatient service. 
On an annual basis, CMS publishes in the Federal Register the PPS 
methodology and payment rates for the various types of provider 
services. Other hospitals, such as cancer and children's hospitals, 
continue to be exempt from PPS and are reimbursed on a cost basis.
    In 1997, CMS created a new class of Medicare providers designated 
as Critical Access Hospitals (CAH). CAHs receive cost based 
reimbursement for inpatient and outpatient services

[[Page 25126]]

delivered to Medicare beneficiaries. However, under PPS or cost based 
reimbursement systems, the hospitals and CAHs are paid an interim rate 
and receive retrospective settlements from Medicare for the difference 
between the interim payment and final payment rate.
    The IHS is proposing in these regulations that when Medicare-
participating hospitals provide services to IHS beneficiaries 
authorized by I/T/Us pursuant to the IHS CHS regulations at 42 CFR part 
136 or section 503 of the IHCIA for urban Indian programs, the 
``Medicare-like rate'' payment methodology and maximum rates paid to 
these Medicare-participating hospitals, including CAHs or other 
hospitals reimbursed on a cost basis, will be no greater than the 
interim rates for applicable services as calculated in the same manner 
as CMS Medicare Fiscal Intermediaries in accordance with 42 CFR part 
413, subpart E, without adjustments or retrospective settlements. 
Adjustments will be made only to correct billing or claims processing 
errors, including when fraud is detected.
    The I/T/U programs operate with discretionary appropriations. IHS 
facilities are subject to the Anti-Deficiency Act. Because of the 
annual cap on IHS' appropriations, the I/T/Us cannot accommodate 
retrospective settlements where payment obligations may not be fully 
quantified until one or more years after the services are provided. 
Thus, the Medicare-like rates payment methodology established by these 
regulations will not include retrospective settlements of final 
payments under Medicare payment methodologies for these providers.
    The IHS has in the past negotiated contracts with some hospitals at 
rates based on the hospital's final settled cost reports that are 
similar to or in some cases lower than the Medicare-like rates. These 
rules are not intended to preclude I/T/Us from negotiating rates that 
are lower than the Medicare rates. However, in the event the I/T/Us are 
not able to negotiate a contract with non-I/T/U providers, the 
Medicare-like rates established by this rule will serve as a ceiling on 
the amount the I/T/U will pay for services.
    According to section 222 of the IHCIA, patients who receive 
authorized CHS services are not liable for the payment of any charges 
or costs associated with the provision of such services. If an I/T/U 
has authorized payment for CHS services provided to an individual who 
is eligible for benefits under Medicare, Medicaid, or another third 
party payor, the I/T/U shall be the payor of last resort under 42 CFR 
136.61. When payment is made by Medicaid, it is considered payment in 
full and there will be no additional payment made by the I/T/U beyond 
the amount paid by Medicaid, (except for applicable cost sharing, if 
any). If there are any other third party payors, the I/T/U will 
coordinate benefits to pay the amount for which the patient is being 
held responsible after all other alternative resources have been 
considered and paid, including applicable copayments, deductibles, and 
coinsurance that are owed by the patient. The I/T/U payment will not 
exceed the rate calculated in accordance with Sec.  136.30(a) basic 
determination and (b) basic payment calculation or the contracted 
amount (plus applicable cost sharing), whichever is less. For purposes 
of the basic payment calculation specified in section 136.30(b), 
required copayments, deductibles and coinsurance are those that would 
have been owed by a Medicare beneficiary under the proposed 
methodology. However, because IHS is barred under the IHCIA from 
imposing any cost sharing on CHS patients, the I/T/U will assume these 
costs.
    In order for a hospital or CAH to be eligible for payment under 
this section, the I/T/Us have adopted the standard Medicare 
requirements for filing of claims. Medicare-participating hospitals are 
required to submit their claims for medical services provided to 
patients who have been approved for payment by the I/T/U in accordance 
with the guidelines established by Medicare. All claims must be 
submitted to the I/T/U agent or FI within a period of time equivalent 
to the timely filing period under 42 CFR 424.44, and must be filed on a 
UB92 paper claim form (until abolished, or on an officially adopted 
successor form) or the HIPAA 837 electronic claims format ANSI X12N, 
version 4010AI (until abolished, or on an officially adopted successor 
form) with the hospital's Medicare provider number/National Provider 
Identifier included (Note: Section 3 of the Administrative 
Simplification Compliance Act, Public Law 107-105 (ASCA), and the 
implementing regulation at 42 CFR 424.32 require that all initial 
claims for reimbursement under Medicare, except from small providers, 
be submitted electronically as of October 16, 2003, with limited 
exceptions).

II. Provisions of the Proposed Rule

    This proposed rule amends the IHS regulation at 42 CFR part 136, by 
adding a new subpart D to describe the ``Medicare-like rate'' payment 
methodology and other requirements for Medicare-participating hospitals 
or CAHs who furnish inpatient or outpatient services, either directly 
or under arrangement, to AI/ANs who are authorized to receive such 
services by the Indian Health Service, Tribe or Tribal organization, or 
Urban Indian organization (I/T/U).
    The proposed rule also amends CMS regulations at 42 CFR part 489 to 
require Medicare-participating hospitals or CAHs that furnish inpatient 
hospital services to AI/AN patients who are authorized for services by 
the Indian Health Service, Tribe or Tribal organization, or Urban 
Indian organization (I/T/U) to accept the payment methodology pursuant 
to 42 CFR part 136, subpart D. The IHS has chosen not to provide 
additional regulation of admission practices here because American 
Indians and Alaska Natives already receive protection against 
discrimination under existing regulations at 45 CFR part 80, 
administered and enforced by the HHS Office for Civil Rights.

III. Collection of Information Requirements

    These regulations do not impose any new information collection 
requirements. The burden of the requirements in Sec.  136.30(e), for 
submitting a claim form, are currently approved under OMB approval 
number 0938-0279.

IV. Response to Comments

    Because of the large number of public comments the IHS normally 
receive on Federal Register documents, we are not able to acknowledge 
or respond to them individually. The IHS will consider all comments we 
receive by the date and time specified in the DATES section of this 
preamble, and, when we proceed with a subsequent document, we will 
respond to the comments in the preamble to that document.

V. Regulatory Impact Statement

    The IHS has examined the impact of this rule as required by 
Executive Order 12866 (September 1993, Regulatory Planning and Review), 
the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-
354), section 1102(b) of the Social Security Act, the Unfunded Mandates 
Reform Act of 1995 (Pub. L. 104-4), and Executive Order.
    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health

[[Page 25127]]

and safety effects, distributive impacts, and equity). A regulatory 
impact analysis (RIA) must be prepared for major rules with 
economically significant effects ($100 million or more in any 1 year). 
This action is not a significant regulatory action under Executive 
Order 12866. Because the economic impact should be minimal, further 
regulatory evaluation is not necessary.
    The RFA requires agencies to analyze options for regulatory relief 
of small 1184 businesses. For purposes of the RFA, small entities 
include small businesses, nonprofit organizations, and government 
agencies. Most hospitals and most other providers and suppliers are 
small entities, either by nonprofit status or by having revenues of $6 
million to $29 million in any 1 year. Individuals and States are not 
included in the definition of a small entity.
    The I/T/Us have entered into contracts with many public and private 
non-I/T Medicare-participating hospitals at rates similar to the rate 
proposed in this rule. The IHS intends to continue existing contracts 
with these hospitals; however, to the extent that I/T/Us are not able 
to negotiate a contract with a hospital, the payment rate established 
by this rule will apply. This action will alleviate the need and 
administrative burden of the IHS as well as the Medicare-participating 
hospital to negotiate rates through individual contracts.
    The IHS conducted a study to determine the financial impact the 
interim payment rates, as proposed by this regulation, would have on 
public and private non-I/T/U hospitals. As part of this study, the IHS 
compared the interim rates to the rates that the IHS has negotiated per 
contracts with public and private non-I/T/U hospitals. For FY 2003, of 
the 387 hospitals that IHS does business with, the IHS has negotiated 
contracts with 48% of these hospitals. Based on IHS data, the [findings 
revealed the overall negative impact to these public and private non-I/
T/U hospitals would be less than 1 %. Of the 387 hospitals in the 
study, 105 are rural hospitals and 84 of these are small rural 
hospitals (less than 100 beds). By comparing the interim rate to full 
billed charges, [i.e. what the IHS pays if a contract is not 
negotiated] revealed a negative financial impact of 8% to these rural 
hospitals. Further analysis of the inpatient bed utilization by 
hospital revealed the IHS represents less than 2% of the rural and 
small rural hospitals total business meaning that 98% of the hospitals' 
income comes from other sources. For these reasons, the IHS has 
determined that the rates proposed by these regulations will not have a 
significant economic impact on a substantial number of small entities 
within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et 
seq.
    In addition, section 1102(b) of the Act requires IHS to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 603 of the RFA. For 
purposes of section 1102(b) of the Act, IHS defines a small rural 
hospital as a hospital that is located outside of a Metropolitan 
Statistical Area and has fewer than 100 beds. For the reasons provided 
above, IHS has determined that this rule will not have a significant 
impact on the operations of a substantial number of small rural 
hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose requirements mandate expenditure in any 1 year 
by State, local, or Tribal governments, in the aggregate, or by the 
private sector, of $120 million. This proposal would not impose 
substantial Federal mandates on State, local, or Tribal governments or 
private sector.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. It has been determined that this action would not have a 
substantial direct effect on the States, on the relationship between 
the national Government and the States, or on the distribution of power 
and responsibilities among the various levels of government, and 
therefore would not have federalism implications.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance)

List of Subjects

42 CFR Part 136

    American Indian, Alaskan Natives, Health, Medicare.

42 CFR Part 489

    Health facilities, Medicare, Reporting and recordkeeping 
requirements.

    Dated: April 27, 2005.
Phyllis Eddy,
Deputy Director for Management Operations, Indian Health Service.

    Dated: April 29, 2005.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.

    Dated: January 24, 2006.
Michael O. Leavitt,
Secretary.

    Editorial Note: This document was received at the Office of the 
Federal Register April 24, 2006.


    For the reasons set forth in the preamble, the Indian Health 
Service proposes to amend 42 CFR chapter I as set forth below:

PART 136--INDIAN HEALTH

    1. The authority citation for part 136 continues to read as 
follows:

    Authority: 25 U.S.C. 13; 42 U.S.C. 1395cc(a)(1)(U), 42 U.S.C. 
2001 and 2003, unless otherwise noted.

    2. Add new subpart D consisting of Sec. Sec.  136.30 and 136.31, to 
read as follows:

Subpart D--Limitation on Charges for Services Furnished by 
Medicare-participating Hospitals to Indians

Sec.
136.30 Payment to Medicare-participating hospitals for authorized 
Contract Health Services.
136.31 Authorization by Urban Indian Organizations.


Sec.  136.30  Payment to Medicare-participating hospitals for 
authorized Contract Health Services.

    Except as otherwise provided in this section, payment to Medicare-
participating hospitals, which are defined for purposes of these 
regulations to include all departments and provider-based entities of 
hospitals (as defined in 1861(e) of the Social Security Act) and 
Critical Access Hospitals (as defined in 1861(mm)(1) of the Social 
Security Act), for any level of care authorized under part 136, subpart 
C by a contract health service (CHS) program of the Indian Health 
Service (IHS) or a Tribe or Tribal organization carrying out a CHS 
program of the IHS under the Indian Self-Determination and Education 
Assistance Act, as amended, Public Law 93-638, 25 U.S.C. 450 et seq.; 
or by referral from an urban Indian organization (as that term is 
defined in 25 U.S.C. 1603(h)) under Sec.  136.31 (hereafter ``I/T/U'') 
shall be based on payment methodologies used in the Medicare program 
for paying for those hospital services as follows:

[[Page 25128]]

    (a) Basic determination. Payment to Medicare-participating 
hospitals or CAHs for services authorized by an I/T/U, whether provided 
as inpatient, outpatient, skilled nursing facility care, or other 
services of a department, subunit or distinct part of a hospital, shall 
be paid consistent with the methodology to determine interim rate 
payments in accordance with 42 CFR part 413, subpart E.
    (b) Basic payment calculation. The calculation of the payment by I/
T/Us will be based on determinations made under paragraph (a) of this 
section consistent with CMS instructions to its fiscal intermediaries 
at the time the claim is processed, provided that no retrospective 
calculations will be performed. Adjustments will be made only to 
correct billing or claims processing errors. Any payments made by the 
I/T/U to the Medicare-participating hospital or CAH shall include any 
beneficiary copayments, deductibles, or coinsurance that the patient 
would be required to pay under Medicare.
    (c) Exceptions to payment calculation. Notwithstanding paragraphs 
(a) and (b) of this section, if an amount has been negotiated with the 
hospital or its agent by the I/T/U, the I/T/U will pay the lesser 
amount determined under paragraphs (a) and (b) of this section or the 
amount negotiated with the hospital or its agent; including but not 
limited to capitated contracts or contracts per Federal law 
requirements;
    (d) Coordination of benefits and limitation on recovery. If an I/T/
U has authorized payment for CHS services provided to an individual who 
is eligible for benefits under Medicare, Medicaid, or another third 
party payor:
    (1) The I/T/U shall be the payor of last resort under Sec.  136.61;
    (2) If there are any third party payors, the I/T/U will coordinate 
benefits to pay the amount for which the patient is being held 
responsible after all other alternative resources have been considered 
and paid, including applicable copayments, deductibles, and coinsurance 
that are owed by the patient; and
    (3) The maximum payment by the I/T/U will be only that portion of 
the payment amount determined under this section not covered by any 
other payor; and
    (4) The I/T/U payment will not exceed the rate calculated in 
accordance with paragraphs (a) and (b) of this section or the 
contracted amount (plus applicable cost sharing), whichever is less; 
and
    (5) When payment is made by Medicaid it is considered payment in 
full and there will be no additional payment made by the I/T/U for the 
amount paid by Medicaid, (except for applicable cost sharing).
    (e) Claims processing. For a hospital to be eligible for payment 
under this section, the hospital or its agent must submit the claim for 
authorized services--
    (1) On a UB92 paper claim form (until abolished, or on an 
officially adopted successor form) or the HIPAA 837 electronic claims 
format ANSI X12N, version 4010A1 (until abolished, or on an officially 
adopted successor form) and include the hospital's Medicare) provider 
number/National Provider Identifier; and
    (2) To the I/T/U, agent, or fiscal intermediary identified by the 
I/T/U in the agreement between the I/T/U and the hospital or in the 
authorization for services provided by the I/T/U; and
    (3) Within a time period equivalent to the timely filing period for 
Medicare claims under Sec.  424.44 of this title and provisions of the 
Medicare Intermediary Manual applicable to the type of service 
provided.
    (f) Authorized services. Payment shall be made only for those 
services authorized by an I/T/U consistent with part 136 of this title 
or section 503(a) of the IHCIA.
    (g) No additional charges. A payment made in accordance with this 
section shall constitute payment in full and the hospital or its agent 
may not impose any additional charge--
    (1) On the individual for I/T/U authorized services; or
    (2) For information requested by the I/T/U or its agent or fiscal 
intermediary for the purposes of payment determinations or quality 
assurance.


Sec.  136.31  Authorization by Urban Indian Organization.

    Subject to availability of funds, when an urban Indian organization 
purchases items and services for an eligible urban Indian (as defined 
in section 4 of the IHCIA) according to section 503 of the IHCIA and 
applicable regulations, the Medicare-like rates as described in Sec.  
136.30 shall apply.
    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR chapter V, as set forth 
below:

PART 489--PROVIDER AGREEMENTS AND SUPPLIER APPROVAL

    3. The authority citation for part 489 continues to read as 
follows:

    Authority: Sec. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and (1395hh).

Subpart B--Essentials of Provider Agreements

    4. A new Sec.  489.29 is added to subpart B to read as follows:


Sec.  489.29  Special requirements concerning beneficiaries served by 
the Indian Health Service, Tribal health programs, or Urban Indian 
health programs.

    Hospitals and Critical Access Hospitals that participate in the 
Medicare program must meet the following requirements:
    (a) 42 CFR 136, subpart D of this title concerning payment 
methodology and amounts.
    (b) Must participate in the following programs:
    (1) A contract health service (CHS) program under 42 CFR part 136, 
subpart C, of the Indian Health Service (IHS).
    (2) A Tribe or Tribal Organization carrying out a CHS program under 
42 CFR part 136, subpart C, pursuant to the Indian Self-Determination 
and Education Assistance Act, as amended, Public Law 93-638, 25 U.S.C 
450 et seq.
    (3) A program funded through a grant or contract by the IHS and 
operated by an urban Indian organization (in accordance with the terms 
defined in 25 U.S.C. 1603(f) and (h)) under which admission or 
treatment is authorized.

[FR Doc. 06-3976 Filed 4-27-06; 8:45 am]
BILLING CODE 4165-16-M